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Longboat Key
Friday, Dec. 24, 2010
4 years ago

TOP STORY, FEB.: Tension present at pension meeting

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by:
Kurt Schultheis
Managing Editor

Throughout the holiday week, YourObserver.com will be counting down the top 12 stories of 2010 (one from each month) from our Longboat, East County and Sarasota Observers. Check back each day for a reprinting — and any relevant updates — of the biggest news items of the year.

ORIGINALLY PUBLISHED: Feb. 4, 2010

Contract negotiation tension between the town and firefighters spilled over into the firefighter pension board meeting Wednesday, Jan. 27.

Firefighter pension board Chairman Keith Tanner, who is also a firefighter/paramedic and district vice president of the firefighters union, told his fellow board members he has lost faith in Foster & Foster, the town’s actuary.

“How did we end up with this huge unfunded liability of more than $12 million in the plan if our investments met their benchmark for a 12-year period?” Tanner asked. “We were told poor investments in our pension are the reason we can’t have our raises and I don’t think that’s the case.”

Tanner made the comments after Key resident, pension board member and former pension actuary Arnold Malasky spent more than an hour addressing a list of 17 questions presented at the pension board’s November board meeting by a consultant hired by the union.

But even though Malasky addressed the questions so pension monies and taxpayer dollars didn’t have to be spent to have the town actuary address the questions, Tanner suggested the board should hire an independent actuary to perform an audit of the firefighter pension’s actions from 2003 to the present.

“The employees have lived up (to their obligations) and donated money to their pension and so has the state by contributing state monies,” Tanner said. “I think the town is trying to shortchange us.”

The remark prompted Town Manager Bruce St. Denis to step to the podium, who explained that the town was in an uncomfortable position because the vice president of the union (Tanner) is also the chairman of the pension board.

“What I see is you folks as the union asking you folks as the board the questions you want addressed,” St. Denis said. “Now the questions have been answered and because you don’t like the answers, you want to spend a lot more money to find different answers.”

Tanner defended his dual-role position, explaining that several other state pension boards have union representatives on pension boards.

And even though pension board attorney Bob Sugarman said Tanner’s dual-role is legally allowed, St. Denis questioned it.

“I question the separation,” St. Denis said. “You as the union put together the list of questions and brought those questions to yourself.”

A visibly upset Tanner and St. Denis, who constantly interrupted each other, prompted Sugarman to ask for a five-minute recess.

When the meeting reconvened, Sugarman made a speech in an attempt to calm down both sides, which are basically at a stalemate in contract negotiations for a new three-year firefighter labor contract.

“Based on my experience as a pension and labor lawyer, some of the tensions inherent in the collective bargaining for a new contract has spilled over to the pension board,” Sugarman said. “It’s unfortunate, but not always unavoidable. It’s hard sometimes to separate the roles.”

Foster & Foster actuary Brad Heinrichs told the board that, in his opinion, performing an audit would be a mistake.

“Arnold has saved your board tons of money by developing his own conclusions independent of what we did,” Heinrichs said. “I would hate to see you spend a whole lot of money to have someone else come up with the same conclusions.”

Both Heinrichs and Malasky told the board that an audit that Tanner suggested would come with a six-figure price tag.

“It’s an outrageous waste of money that would come out of this pension,” Malasky said. “For us as a board to do that is pissing away money for no reason whatsoever.”

Tanner, however, continued to push for the audit, because he said, “there’s a big push (at the commission level) to go after our pension.”

Heinrichs suggested that before the board considers an expensive audit that the union’s consultant be presented with the answers to the questions to see if they addressed his concerns.

Pension board member and firefighter Lt. Michael Murphy made a motion to provide Malasky’s answers to the union consultant, while allowing Malasky to work with the consultant to address any concerns the consultant may have.

The pension board also agreed to request that the union’s consultant, who is not a licensed actuary, attend the next board meeting if he still has concerns with the plan.

Said St. Denis: “In the interest of transparency, we are giving great weight to some consultant for the union who is mysterious. I think it’s important they are here to respond so we know who it is we are dealing with.”

In November, firefighter/paramedic Jeff Bullock produced the list of questions drawn up by the union’s consultant, which questioned whether the board approved a cost-funding change seven years ago that amortized pension liabilities over a 15-year period to a fixed 30-year period.

“My view was Charles Slavin (the former state actuary who disagreed with the town’s pension valuations) was off the walls,” Malasky said. “His whole process about complaining about six or seven valuations in one letter was ridiculous.”

Majority Rules
A stalemate continues to brew on the firefighter retirement system board of trustees.

The board, currently made up of two Key residents and two firefighters, is split down the middle on whom to elect to its fifth board seat.

So, firefighter Lt. Michael Murphy continues to hold onto the fifth seat, even though his term expired Oct. 31.

The town’s three retirement boards each require two employees and two Key residents, with the fifth board member selected by the board.

Each seat on the board is a two-year term.

Town Clerk Trish Granger says unless one of the sides backs down, Murphy will continue to hold the seat and the firefighters will continue to have a majority of the pension seats.

Contact Kurt Schultheis at kschultheis@yourobserver.com
UPDATE:
The firefighters' pension board approved two studies at a cost of $65,000 in December to have all aspects of their pension investigated. The town and the firefighters are still at impasse over a new contract.